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Monday, May 23, 2011

Town Councils - conflict of interest?

A couple of interesting revelations have arisen after the general elections in Singapore this year. These are worth pursuing in the interest of transparency. In the end, I suspect that there may not be anything to be concerned about. But, prima facie, there appears to be a potential for conflict of interest in the management of some town councils.

I am not prepared to jump the gun and declare that there has been an obvious case of conflict. There are so many details that are missing that it is impossible to state with any degree of certainty whether conflict might exist.

Soon after the elections, information surfaced that the General Manager of Aljunied GRC was also the Managing Director of CPG Facilites Management Pte Ltd. This is the company that was awarded the town management contract at Aljunied Town Council. Now that Aljunied has fallen to the opposition Workers Party, there will be a handover of the Town Council management pretty soon.

In an article in the Straits Times on 12th May 2011 regarding the handover of the Aljunied Town Council, the following was stated:

“Aljunied Town Council is now managed by CPG Facilities Management, with whom the town council signed a three-year contract last year. CPG managing director Jeffrey Chua is the town council’s general manager. As the town council managing agent, CPG engages the services of other companies for services such as cleaning, maintenance and lift rescue.”

On the surface, the idea that the same person is the General Manager of the Town Council as well as the Managing Director of CPG appears to be a conflict of interest.

Not too long after this, there emerged news that an employee of Esmaco Pte Ltd working at Jurong Town Council had been sacked. There were allegations about her being sacked because of her election campaign activities when she was supporting the National Solidarity Party. This was denied by her employers. In the midst of this, it has turned out that Mr Ho Thian Poh is both the General Manager of the Jurong Town Council and the Managing Director of UGL Premas Ltd. Esmaco Pte Ltd, which is the managing agent of Jurong Town Council, is in fact a subsidiary UGL Premas Ltd.

So, we now have a situation where the GM position in two Town Councils has been occupied by individuals in a directorial capacity in the companies that have been awarded the contract to be managing agents.

I did a quick check on the names of all the General Managers or Secretaries in the various Town Councils. They are as follows. (I have also included the companies that are carrying out the estate management in these estates):

http://apfm.org.sg/apfm/sub/members.htmlThe Association of Property and Facilities Managers lists Teng Ann Boon, Albert as being from EM Services Ltd. He is the General Manager at the Holland - Bukit Panjang Town Council.

A google search on Christina Goh throws up a ‘Linkedin’ profile with a past employment at UGL Premas. There is no way of verifying whether this is the same Christina Goh at Hong Kah Town Council.

The bottom line is that a simple search on the internet does not throw up any web of connections. More digging is needed to get to the bottom of this… if at all there is anything to be uncovered.

Assuming a person is a General Manager of a town council, is there necessarily a conflict of interest if he is also a director of the company that is appointed as a managing agent of the town council? Much will depend on the nature of the GM’s role. If the arrangement is that the town council awards the contract to a company like Esmaco and as part of that contract Esmaco appoints it employee or director to be the GM of the town council, then this arrangement would not on its own amount to a conflict. Presumably, the town council could still call the shots in terms of the contractual obligations of Esmaco and could still hold Esmaco accountable for any breach of service standards. The GM would effectively be an employee of Esmaco and he would be in charge of fulfilling Esmaco’s contractual obligations to the town council.

There would be an unpardonable conflict of interest if a person is at first appointed as a GM of the town council and then he is in charge of procuring the estate management contract and he proceeds to procure the services of Esmaco where he is a director or he is a director of Esmaco’s parent company. I doubt that this was the nature of the arrangement between the town council and Esmaco. It is more likely that Esmaco was appointed to manage the estate and the GM was appointed as Esmaco’s representative under the contract. He is probably under the payroll of Esmaco as well.

There are other issues that can potentially arise out of the way these town councils are managed. If the GM was involved in the process of awarding specific contracts for instance for tiling works or building covered walkways, how is the process managed in the town council. Does the town council leave Esmaco and its representative to decide on the contracts to be awarded and accordingly the pricing involved or does the town council exercise direct control over the process or at least some oversight. Given that estate management in PAP wards is being contracted out to private companies, the important question to be asked is the level of oversight that is being exercised over the way in which these companies operate.

If we look at the CPG Facilities Management website, we can see that as part of the township management services they perform, they carry out fund management and investment as well. http://www.cpgfm.com.sg/township.shtml

It is not clear whether all private companies carrying out estate management services in fact engage in investment on behalf of the town councils. If they do, this is another area to be concerned about in terms of the extent of oversight and control exercised by the town council itself.

But of course, if contrary to my conservative opinion, it turns out that there is something more to the position held by these GMs, then let the proverbial shit hit the fan.

40 comments:

Straight Talk
said...

Thank you for this article. I had read the article as well and thought that it was a conflict of interest to own a cleaning company and be the general manager of the town council. How does one measure accountability in this instance? Can someone from the government please comment?

Smells like the US administration in Iraq... where the private contractors were awarded contracts from the US government, US tax payers money were spent on dunno what and these contractors make a killing...huat ah! Because the contractor is also the officer-in-charge?

I am sure many more of such cases would surfaced if all these senior managers' background are being scrutinized and checked. Some clever ones would not want to use their names but instead using their relatives or siblings names to set up those companies to serve their own TCs contract works. I heard these things been on for some many years already.

contracts for town council projects can be a major source of income for some companies. I wouldn't be surprised if there was some of this low-level corruption involving some individuals. Whether this is a problem that arises on a ad-hoc basis or is a cancer that is broader and more systemic is something that is impossible to make out from available facts. Whatever statements we may try to make would be pure conjecture. I don't want to engage in that. So, i am merely posing a question. Is there something out there? And what is the scale of this problem, if any?

Thiss is the right web site for anyone who wishes to understand this topic.Yoou know so much its almost tough to argue with you (not that I personally will need to…HaHa).You definitely put a new spin on a topikc that'sbeen written abot for years.

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Town Councils appoint a managing agent (like EM Services, FMSS, CPG) to run their daily operations and manage other contractors like cleaning companies. The General Manager is just one of the jobs to fill within the Town Council, like finance executive or property manager. All these staff are provided by the Managing Agent. The GM will change whenever the town council decides to contract a different MA.

About Me

I blog primarily about the law & politics in Singapore, occassionally veering off into socio-economic issues. Article 14 of the Singapore Constitution protects the Freedom of Speech, Expression,Peaceful Assembly and Association. But, there are excessive restrictions on these Freedoms. I hope that I can, in my small way, contribute to the gradual realisation of these Freedoms in our land